Non Prophets

City council ponders an understandable, but unwise, proposal

If nothing else, Pittsburgh City Council has found a way to get back at local charities for all those dinner-time telemarketing calls. Just as Mayor Tom Murphy and the city's nonprofits were sitting down at the table together, Council President Gene Ricciardi has intruded with a proposal sure to put them off their food.

The city's nonprofits range from massive hospitals to tiny arts groups. But despite all they contribute, Murphy and others have cited them as culprits in the city's financial woes. At least 15 percent of the city's taxable property belongs to nonprofits, meaning some of the most valuable property in places like Oakland and Downtown is tax exempt.

In July, however, Murphy announced he'd struck a deal with the Pittsburgh Public Service Fund, an umbrella group representing the nonprofits, to make voluntary payments to city coffers. Estimates vary about how much the deal would bring in, with most figures in the $3-to-$5-million range. But as drafted, the agreement lasts for only three years. And some councilors are now arguing that the deal should be permanent...just like everyone else's taxes are.

Murphy has not taken a position on the proposal: "We are looking forward to having a thorough discussion with council," said mayoral spokesman Craig Kwiecinski, with a somewhat practiced air. But Murphy probably isn't crazy about council's meddling: He's promised a year-end budget surplus, which would disappear if the non-profit deal falls through. Meanwhile, the non-profits oppose any extension. During a public-affairs radio program I co-hosted days before Ricciardi announced his proposal, Public Service Fund spokesperson Rev. Ron Lengwin said the agencies expect the city to straighten itself out within the three-year period.

If you're like me, your first response is, "Hey, I wish I had to pay extra taxes for only three years too." But it's worse than that: The nonprofits also don't have to pay a dime unless the city lives up to its own budgetary promises. Imagine what you and I could have done with a similar deal. We'd get back every nickel we sunk into building the Pirates a ballpark, for starters.

And under the terms of the arrangement, only the total amount raised will be publicly disclosed, along with a list of contributors. We won't be told how much each individual nonprofit provided. Did Pitt, among the region's biggest employers, contribute more than the financially strapped Pittsburgh Ballet? We'll never know. The rest of us have to disclose our property-tax bills, at least -- home values are listed on the county's Web site. But while the nonprofits will get good PR for their contributions, we won't know how much they actually gave.

The nonprofits contend that every dollar they pay to the city is money that won't be spent on caring for the sick, teaching college or staging concerts. Which is true. But it's also what everyone says. Corporations insist that if they didn't have to pay so much in taxes, they'd hire more people. And if we private citizens didn't have so many taxes, maybe we'd have more money to, well, give to nonprofits.

So making nonprofits pay in perpetuity will no doubt appeal to many Pittsburghers. There's just one little problem with Ricciardi's idea: It has no legal basis whatsoever. Under the state's Purely Public Charities Act, it's all but impossible to shake down a nonprofit for revenue: Voluntary payments are all we're likely to get. Even City Controller Tom Flaherty, who is no stranger to tilting at windmills and who has complained mightily about the growth of nonprofits, has given up. He thinks the city would be better off hitting up the legislature for some sort of revenue sharing. You're in trouble if you're counting on Harrisburg to be more charitable than the charities themselves.

Simply put, the city can't force the nonprofits to do anything...and trying to do so risks scuttling the deal entirely. It might be more realistic to request public disclosure of who gave what to the city. That way, we could thank them in proportion to the gift -- just like a nonprofit theater group does in its program. Otherwise, council would be better off raising money the way nonprofits do: by holding bake sales or bingo games. Or by hiring really pernicious telemarketers.